Prime Minister Julia Gillard is moving to clear the last piece of policy baggage left by Kevin Rudd - what to do about climate change now that the Government has shelved its emissions trading scheme (ETS) for a couple of years.

Federal Cabinet met in Canberra yesterday to finalise a package of interim measures for business and households to cut greenhouse gas emissions.

The Government has hundreds of millions of dollars set aside for renewable energy projects. It has not decided yet how the money will be spent, but the push is on to help business and individuals cut their carbon footprint and create jobs along the way.

"The Government is working on these things now. When I've got something more to say then I will," Ms Gillard said.

"But we will work on these things methodically. We will work on these things so that the policies are right - right for the Australian nation, right for the future and take us forward."

The Government is adamant no announcement will be forthcoming in the next couple of days, including when Ms Gillard addresses the National Press Club on Thursday.

Keeping people in suspense, the Government will not reveal what she plans to say.

To keep the momentum going, Ms Gillard made a new $220 million spending promise today- a tax refund for families to help cover the cost of school uniforms.

Close to one million families claim spending on books, stationery and computers - up to $390 for primary school children and $779 for older students - but many do not claim the full amount and others do not claim anything at all.

"A re-elected Gillard government will extend the coverage of the education tax refund to school uniforms," Ms Gillard said.

"I believe having a school uniform gives people a sense of self, a sense of discipline, a sense of how to present yourself to the world.

"I also think it undercuts some of those unhealthy things that can happen at schools when there's a competition for the latest most fashionable item. That's why I think this is appropriate."

The rebate will not apply until 2011/12 and families will not get the money until the year after that.

"This is a policy that we will implement if re-elected at the forthcoming election, whenever that is," Ms Gillard said.

But Opposition Leader Tony Abbott says that does not alleviate any financial pressure now.

"If she'd been fair dinkum about giving more help to parents why didn't she, as the education minister, do this at the start of the year rather than now, with the educational year almost half over?" he said.

Campaign trail

As Australia waits for Ms Gillard to fire the election starting gun, the heavy-hitters are out campaigning, targeting marginal seats.

Mr Abbott went to Queanbeyan, a stone's throw from Canberra in the highly prized seat of Eden Monaro.

Since 1972, the seat has gone to whichever side has won the election, and the pressure is on former Howard government staffer David Gazard to wrest it from Labor's Mike Kelly.

"And I can think of no better person to win Eden Monaro than David Gazard. He is an outstanding candidate."

Mr Abbott also says East Timor's parliament has spelled the end of Ms Gillard's plan for a regional refugee processing centre there.

"The East Timor solution has absolutely and totally sunk, completely and totally sunk," he said.

But the Prime Minister does not accept that it is all over.

"This was a vote on a resolution in the East Timorese parliament at a time that the parliament was not well attended," she said.

"Our focus is on discussions with the East Timor government and the East Timor government continues to confirm to us that it is open to the dialogue about the regional processing centre. And we're in that dialogue now."

Mr Abbott suggests she phone Nauru.

"My understanding is the Nauruans would welcome an approach from senior levels of the Australian Government," he said.

"I invite her to make that approach."

Ms Gillard has ruled that out because the Pacific island nation has not signed up to the United Nations Convention on Refugees.

But yesterday afternoon the president of Nauru, Marcus Stephen, told commercial radio in Brisbane he is looking into changing that because his country benefited from the Howard government's detention centre.

"It was a success for us. There was a lot of offshoots that came out of it in terms of our improvement in our human resources; also with our essential services like water, electricity," he said.